Wolfspeed rallies on earnings beat; analysts still cautious amid execution risk
Investing.com — Wolfspeed (NYSE:WOLF) reported a narrower-than-expected fiscal first-quarter loss even as margins were hurt by factory start up costs as the semiconductor products maker stepped up efforts to expand production.
Wolfspeed rallied more than 14% in early Tuesday trading.
The company reported an adjusted loss of $0.53 a share on revenue of $197.4 million, topping Wall Street estimates for a loss of $0.67 on revenue of $196.2M.
The better-than-expected results come even as margins more than halved to 13% in Q3 from 36% a year earlier, owing to $34.4M in costs related to efforts to expand production.
«As part of expanding its production footprint to support expected growth, Wolfspeed is incurring significant factory start-up costs relating to facilities the company is constructing or expanding that have not yet started revenue generating production,» the company said.
For Q2, the company guided for an adjusted loss in a range of $0.56 to $0.70 per diluted share on revenue between $192M and $222M, in-line with estimates for a loss of $0.68 on revenue of $207.2M.
Analysts from Oppenheimer said WOLF delivered a «solid» quarter, although the execution risk remains.
«While we view WOLF's progress as substantial, we remain on the sidelines pending further derisking of Mohawk Valley,» the analysts said.
Analysts from BofA reiterated an Underperform rating due to: 1) Continued EPS loss into CY25, 2) SiC competition continues to increase on both device and materials side, and 3) High fixed cost model.
Additional reporting by Senad Karaahmetovic
Read more on investing.com
